IT CONSULTING ASSIGNMENT-1

K.SUBRAMANIAN

DM16121

PROBLEM STATEMENT

Government of Haiti has been toying with an idea of using Satellite Technology for better utilization of their resources. The proposal is for using this technology to optimize its agricultural resources, weather forecasting ability, nationwide television broadcasting, internet broadband communication and for social development. The governing authority is in the stage of feasibility analysis where economic, operational and organizational possibilities are to be evaluated.

As a consulting firm, identify the value chain of satellite industry and figure out the business models for various players in this market.

SATELLITE INDUSTRY

Typically, three players make up the satellite “upstream eco-system”.

1. Satellite manufacturers.2. Satellite Launchers 3. Satellite operators

SATELLITE MANUFACTURERSA satellite manufacturer is contracted by the satellite operator to build a satellite. After launch, the satellite resides in an unimaginably harsh operating environment with no opportunity for repairs. The satellite manufacturing requires years of designing and building. The testing process is very tedious. Each part is individually tested and then the satellite as a whole. The technology includes an in-built system to ensure reliability and proper functioning.The major companies that build large satellite platforms are:

o Airbus Defence and Space Ltd.

o OHB System Ltd.

o Thales Alenia Space Ltd.

o Boeing

o Loral

SATELLITE LAUNCHERSLaunch providers have two major responsibilities. The first is to build rockets to put satellites and other payloads into the orbit. The second is to successfully launch it. Following the rocket's completion, the launch provider delivers it to the launch site for integration with the

satellite. From this point on until the satellite separates from the rocket, the launch provider has the control. After the satellite separates, the satellite manufacturer assumes control.The major companies that are present in this domain are:

o SeaLaunch

o Arianespace

o ILS

o Boeing Launch Services

SATELLITE OPERATORS

Satellite operators coordinate the various aspects of the specialized functions pertaining to satellite communication. They assume control over the satellite after it is launched into the orbit and lease satellite capacity to customers for contracted periods.

The major companies present in this domain are:

o SES S.A.

o IntelSat

o EutelSat

o ISRO

BUSINESS MODELS PREVALENT IN INDUSTRY

The largest part of the private commercial business lies on the downstream part of the value chain, where services are delivered to end users, being they institutions and corporates (e.g. military communications, land mapping, environment monitoring, ATM, M2M communications), or mass market (e.g. direct TV, mobile communications, Google Earth, GPS receivers, car navigators). That’s also where the highest profits are earned. The various business models possible are:

o Government agencies procure space systems from the manufacturing industry through the money

of the tax payers, wherein the satellite is procured from the manufacturers through a space agency. This satellite is then used, in particular for one shot application (e.g. an astronomy satellite) or for missions which need to be fully controlled by governments for strategic reasons.

o Another model used is the Government owned, Company owned Model. In this model the

government and the company co-own the satellite. This is done when the government does not want to keep the duty of operating the satellite or when the satellite may have a commercial purpose. In that case the operations of the system and its services are granted to an operator, through a concession, a convention of use, or a licensing scheme. E.g. the satellite services are given on contract for Value added Services such as telecommunication services.

o The concession model is another business model that further decreases the involvement of the

government. Here the private operator invests with private funds to build the infrastructure and gets back his investment and benefits through sales of service to the public partner through a long term contract.

o The co-ownership model is used when the application of the satellite is addressing both the public

and the commercial market and the size of investment for the private party is compatible in terms of the commercial returns. The rights of the system and the sharing of its operational capabilities

is decided beforehand. In some cases, the private party pays the government for the ownership through the revenue generated through commercial activities,

o Commercial Telecoms are also an option wherein the telecom companies fund and upgrade their

satellites through the equity generated by the company, thanks to the solid market for the sale of bandwidth capacity. Their customers are the Value added service providers who in turn address the market of direct TV, radio or Internet services.

INFLUENTIAL PEOPLE TO BE IN CONTACT WITH

o FRANÇOIS AUQUE, Head of Space Systems, Airbus Defence and Space

o Christopher M.Chadwick, President and CEO, Boeing Defence, Space and Security

o James Zrust, CFO, Boeing Defence, Space and Security

o Karim Michel Sabbagh, CEO, SES S.A.

o Dr. K.Radhakrishnan, Chairman, ISRO ( though not the market leader, ISRO took the

world by surprise with Mangalyan, thus showing its prowess in this field. For a country like Haiti, where best quality at least cost is important, ISRO could be a very good choice and a front runner).

o * Dr. A.P.J. Abdul Kalam, as a satellite expert consultant.

MAJOR EVENTS IN THE INDUSTRY

o 33rd AIAA International Communications Satellite Systems Conference

(ICSSC), September 7-10, 2015, Gold Coast, Australiao Summit for Satellite Financing, September 14-16, 2015, Paris, France

o Summit on Earth Observation Business, September 17-18, 2015, Paris, France

o CASBAA Convention 2015, October 26–28, 2015

o MILCOM 2015, October 26-28, 2015, Tampa, Florida